Caesars Entertainment (CZR) Stock Surges 20% on Takeover Reports

TLDR

• Caesars Entertainment (CZR) surged 20.6% Thursday after reports it is weighing takeover offers, including a bid from Tilman Fertitta’s Fertitta Entertainment.
• A management-led buyout is also reportedly under consideration; Caesars declined to comment.
• Caesars controls 50+ casinos across North America with an enterprise value of around $16B, making any deal one of the largest in gaming in years.
• MGM Resorts jumped 5.79% Thursday on the news, but slipped 0.6% in Friday premarket to $37.41.
• Wynn Resorts and Las Vegas Sands also posted gains Thursday, up 2.48% and 1.60% respectively.

Caesars Entertainment (CZR) had a wild Thursday session after the Financial Times reported the casino giant is fielding takeover interest.

Caesars Entertainment, Inc., CZR

The stock jumped 20.6% to hit $3.55 p.m. ET levels, one of the biggest single-day moves the stock has seen in some time.

The FT report named Tilman Fertitta and his Fertitta Entertainment as one potential suitor. Fertitta has been in the casino business since 2005, when he bought the Golden Nugget Las Vegas and Laughlin properties through Landry’s.

He later expanded the Golden Nugget brand to Atlantic City, Biloxi, and Lake Charles, picking up the former Trump Marina in 2011 along the way.

A management-led buyout is also reportedly on the table. Caesars declined to comment on the report.

CZR operates more than 50 casinos across North America, running well-known brands including Caesars Palace, Harrah’s, and El Dorado.

The company also runs a sports betting app, which posted improved results in Q4.

Given CZR’s debt load, its enterprise value sits at roughly $16 billion. That would make any completed deal one of the biggest in the gaming industry in years.

Casino Sector Catches a Bid

The takeover chatter didn’t stay contained to CZR. The whole sector got a lift.

MGM Resorts (MGM) closed up 5.79% at $37.62 on Thursday. Wynn Resorts (WYNN) rose 2.48%, and Las Vegas Sands (LVS) gained 1.60%.

By Friday premarket, though, the momentum had cooled. MGM slipped about 0.6% to $37.41 before the bell.

With no confirmation from Caesars, traders are keeping expectations in check. CZR’s heavy debt load adds another layer of complexity to any potential deal.

MGM Makes a Separate Move

Away from the takeover talk, MGM and its BetMGM joint venture announced Thursday they would commit more than $1 million to responsible gaming initiatives tied to Problem Gambling Awareness Month.

BetMGM’s chief compliance officer Rhea Loney described the campaign as “an important reminder” of “our year-round responsibility.”

Friday morning brings a fresh macro test. The Labor Department releases January producer price data at 8:30 a.m. ET, a wholesale inflation print that investors watch closely for clues on interest rate direction.

The February U.S. jobs report follows on March 6, another number that can move rate expectations and, in turn, travel and leisure names like MGM.

As of Thursday’s close, CZR was up 20.6%, MGM up 5.79%, WYNN up 2.48%, and LVS up 1.60%.

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